CFTC crypto leverage plan draws court scrutiny after Loper Bright

The Commodity Futures Trading Commission published an advance notice of proposed rulemaking on 5 October, introducing two regulatory frameworks for crypto markets without waiting for Congress to act. The Senate's CLARITY Act had failed 49-50 on 15 September. Chairman Michael Selig moved within three weeks.

The proposal splits into two tracks. Regulation CTX targets leveraged and margined retail crypto transactions. Regulation CAM creates a registration category for crypto asset venues, requiring proof-of-reserves reporting and anti-manipulation controls. Spot trading with no leverage stays under state money-transmitter licences.

Defense attorney Renato Mariotti describes the CFTC's statutory reading as clever. He also warns it may not survive a court. In 2024, the Supreme Court's Loper Bright decision stripped agencies of the judicial deference they had relied on for decades. A framework built on a creative interpretation of existing Commodity Exchange Act authority now has to persuade a judge rather than simply assert expertise.

The CFTC itself acknowledged in the notice that its powers have limits without Congressional authorisation. That acknowledgment does not blunt the legal exposure. It names it.